Social Security Amendment Bill (No 3)

The Green Party has some criticisms of the Social Security Amendment Bill (No 3). I am speaking tonight on behalf of our spokesperson on this area, Catherine Delahunty, who is the expert. Although we acknowledge that the bill seeks to address two perceived anomalies in the current social security legislation, the Government fails to acknowledge that the two provisions that it is attempting to patch up through this bill are themselves anomalous, discriminatory, and unfair.

First, I wish to address the provisions of clause 4 of the bill, which will ensure that students eligible for student allowances, whether or not they access them, are not eligible for the accommodation supplement. At present, a perceived loophole exists so that students who may be eligible for a student allowance but choose not to apply for it can access the accommodation supplement instead. In most cases, that provides a higher level of accommodation support than the accommodation benefit payable under the student allowance regulations. The level of accommodation supplement a person can receive under the Social Security Act is subject to a regional cap, responsive to his or her actual accommodation costs. However, the accommodation benefit that a person entitled to a student allowance can receive is not; it is capped at a fixed rate regardless of the student’s actual accommodation costs. The fixed-rate cap for the student accommodation benefit is a significant cause of debt incurred by students. Often they simply cannot find accommodation they can afford on their student allowance and the flat-rate accommodation benefit. There is an inherent discrimination and unfairness in the way that students are treated in this regard by comparison with everyone else.

I note that the recently released report from the Minister for Social Development and Employment’s Welfare Working Group proposes abolishing the accommodation supplement for everyone, and introducing a fixed-rate accommodation allowance similar to the student accommodation benefit, albeit with different regional rates for all people requiring accommodation assistance. That would be a retrograde measure, indeed. Just as students currently encounter considerable difficulties finding accommodation they can afford, and frequently end up living in overcrowded and substandard conditions as a result, the recommendations of the Welfare Working Group would exacerbate that problem many times over. They ghettoise beneficiary and low-income New Zealanders into the sort of disgraceful housing estates that we see in the northern part of England and Scotland, with all the associated social dysfunction and crime that goes with that. Rather than extend the student accommodation benefit regime to beneficiary and low-income New Zealanders, the scheme should offer students accommodation costs that are linked to, and genuinely meet, their actual accommodation costs. Rather than putting a sticky plaster over the pustular sore that is the student accommodation benefit—which this bill does—the Government should be seeking to heal it.

Clause 5 of the bill addresses the issue of how ACC weekly compensation payments interface with benefit payments payable by Work and Income. At present, benefit payments are deducted from weekly ACC compensation payments on a dollar-for-dollar basis. However, a loophole discovered through a case at the Social Security Appeal Authority reveals that in law weekly compensation payments paid directly by employers accredited with ACC should be treated as income and deducted from benefits at a different, more favourable ratio. The current practice, which this bill seeks to retrospectively validate—and that in itself is repugnant to good legislative practice—can result in someone who has been on a benefit while working part-time suddenly having their benefit reduced to zero after an injury.

The Green Party does not support people being able to double dip. The dollar for dollar deduction is fair enough if someone’s eligibility for weekly compensation is caused by the same event as his or her eligibility for a welfare benefit. But when someone is receiving, say, a sickness benefit in respect of a chronic illness, and is working part-time, it is completely unfair, if he or she becomes fully incapacitated as a result of an injury, to have the sickness benefit reduced by one dollar for every dollar of weekly compensation received. Such a person effectively receives no compensation for his or her loss of earning due to injury, and that is repugnant in respect of the principle of real compensation upon which our accident compensation scheme was founded. Were the Government to propose reverting to the pre-1999 provision under the weekly compensation – abated welfare benefits, in the same manner as any other income does in the absence of a common causal event for both entitlements, we would consider supporting clause 5. But under the current, unfair, dollar for dollar deduction system that applies for weekly compensation, we cannot. I sincerely hope that the select committee will address these profound points, provided to me by my colleague Catherine Delahunty. Thank you.